Google and China: Some General Thoughts

I have deferred blogging on the Google/China imbroglio for a few reasons. First, heavyweights such as Jonathan Zittrain have tracked International online censorship and online security issues more closely than I have. Second, after Google’s provocative blog post, I wanted to see the facts develop rather than rely solely on Google’s assertions. The spin doctors are now moving in, so the useful development of the factual record will be slowing down.

Third, and perhaps most importantly, the Google/China situation is really complex and multi-faceted, and it’s been difficult keeping all of the issues straight. Some issues raised by Google’s announcement include:

* cybersecurity, both corporate and personal

* political and industrial espionage

* suppression of political speech, especially of dissidents

* censorship of search engine results and the likelihood that censorial efforts can succeed on the Internet

* “cyber-imperialism,” i.e., exporting US norms about Internet law to other countries

* economic protectionism and whether US companies compete with local Chinese companies on a level playing field

* geopolitical and trade relationships between two world nuclear superpowers

Heady stuff! It would make a good summer blockbuster movie.

Although most folks have lauded Google for its principled stand against China’s censorship, I’m not 100% clear that Google’s decision is entirely selfless. First, as has been noted frequently, Google has not been making inroads against local search leader Baidu. Further, the deck may be stacked against Google in changing that situation, due perhaps to economic protectionism from the Chinese government. Second, in a point that has gotten less attention, some members of Congress (most notably Rep. Christopher Smith) have repeatedly jawboned Google and other Internet companies to curtail their support of the Chinese government (see, e.g., the Global Online Freedom Act). Google might have rationally concluded that voluntarily cutting China loose could abate Congress’ interest in regulating its international operations, which might ultimately avoid profit-degrading domestic regulations.

On that point, I fear that we may hold duplicitous expectations when US Internet companies go global. If a US Internet company wants to successfully compete in a foreign market, it must open a local office and build a localized versions of their services reflecting local legal requirements. Inevitably, these localized versions will be more speech restrictive than the US version of the service. Foreign laws don’t have the First Amendment, 47 USC 230 or (in most cases) even a weak safe harbor like 17 USC 512, plus local cultural norms may tolerate unpopular speech less than we do. So what should a US service provider do when trying to expand internationally? It has a few options, none of them particularly attractive:

* It can skip unreasonably censorious markets altogether, like Google proposes to do in China.

* It can comply with local laws, even though that runs counter to US laws and norms.

* It can ignore local laws, which is typically not a successful plan. In extreme cases, it can lead to local company executives going to jail.

* It can try to change the local country’s laws to be more like ours, either through direct advocacy or by asking the US government to pressure the local government. We routinely use trade negotiations to do this; for example, we have successfully exported our copyright laws this way. But countries usually aren’t thrilled to have the US tell them what their laws should be.

Now, I don’t support China’s efforts to censor search results or suppress political dissent. I understand the arguments that free speech is such a basic human right, like freedom from torture, that we simply won’t tolerate any other local choice. However, we already implicitly accept that Internet companies routinely engage in some types of legally compelled or motivated speech restrictions in other countries when they localize their services—perhaps not to the degree exercised by China, but nevertheless more than we would allow in the US. (I note that China might factually dispute this claim because it claims to have an “open” Internet, although the reports I’ve seen suggest this claim is embarrassingly disingenuous). I recognize that I’m making a slippery slope argument about what government-mandated censorship we’ll tolerate from US Internet companies, but I think we should acknowledge the slippery slope before we categorically reject search engines’ efforts to comply with China’s rules.

If Google ultimately exits China, it would leave Baidu as the search engine market kingpin. This raises another issue I haven’t seen fully discussed. I’m going to assume for a moment that Google is a superior search engine to Baidu. (I’ve never used Baidu, so I have never actually compared the two). Knocking Google out of the Chinese market does two things. First, per my assumption, it takes the better information resource away from Chinese consumers. Second, by reducing competitive pressures on Baidu, quasi-monopolist Baidu is more likely to reduce R&D and service improvements.

If my predicate assumptions are correct, in the long run US consumers will have a consistently superior search tool compared to Chinese consumers. (I also assume China will keep interfering with Chinese consumers’ access to Google.com and that superior market entrants won’t overtake Baidu). Over time, China may hinder its overall long-term global competitiveness due to an inferior information infrastructure. Perhaps this assertion is overly stylized, but I think effective information resources—such as good search engines—are necessary to maintain healthy economic markets and to enable cutting-edge R&D. Thus, the Chinese government should view losing Google as a Chinese search engine competitor as a long-term detriment.

One final procedural point. Google sparked a global verbal spat between two nuclear superpowers through a single blog post. Talk about the power of blogging! Google’s decision to post a confrontational blog post may have helped get the US administration on board but simultaneously reduced Google’s ability to negotiate with the Chinese government. I’m no expert in diplomacy or Chinese cultural norms, but my reading of Google’s post is that its double-barreled accusations of government-sponsored hacking (which Google has not conclusively proved) and censorship left the Chinese government with few options to save face. Thus, Google effectively forced the Chinese government to take a hard line and reject most proposed compromises. I trust Google knew what it was doing and decided that was the right course of action, but in my opinion Google’s approach has pre-determined the final outcome.